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HomeMy WebLinkAboutReso 023-87 ViacomCableRESOLUTION NO. 23 - 87 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING THE TRANSFER OF CONTROL OF VIACOM AND RESCINDING RESOLUTION NO. 134-86 WHEREAS, Tele-Vue Systems, Inc., a wholly owned subsidiary of Viacom International Inc. ("Viacom"), is franchised to provide cable television service in Dublin; and WHEREAS, an earlier agreement, identified in City of Dublin Resolution No. 134-86 assigned the franchise to Cablevision of East Bay, Inc.; and WHEREAS, the transaction identified in Resolution No. 134-86 was not completed; and WHEREAS, Viacom has entered into a merger agreement with a subsidiary of National Amusements, Inc., as fully explained in a letter dated March 13, 1987; and WHEREAS, Tele-Vue Systems, Inc., has agreed to continue to be bound by all applicable cable television franchise terms and conditions after the merger transaction; and WHEREAS, the transfer of control shall be in accordance with City of Dublin Ordinance No. 30-85. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin hereby grants its approval to permit the transfer of control of Viacom to National Amusements as set forth in City Ordinance No. 30-85 in the letter dated March 13, 1987 attached hereto and made a part hereof. BE IT FURTHER RESOLVED that the terms and conditions of Resolution No. 134-86 are hereby rescinded. 1987. PASSED, APPROVED AND ADOPTED this 13th day of April, AYES: Councilmembers Hegarty, Moffatt, Snyder, Vonheeder and Mayor Jeffery NOES: None ABSENT: None V'mcom Cablevision March 13, 1987 Mr. Paul Rankin Cable Administrator 6500 Dublin Boulevard Dublin, CA 94568 Dear Mr. Rankin: I am pleased to inform you that Viacom International Inc. ("Viacom"), the ultimate parent company of Tele-Vue Systems, Inc., the cable franchisee in Dublin, has agreed to merge with a subsidiary of National Amusements, Inc. National Amusements is a major corporation engaged in the local motion-picture theatre business and is currently the largest single shareholder of Viacom. Viacom will be the surviving corporation of this merger, and this transaction will not cause any changes in the operations or management of the cable system. Tele-Vue Systems, Inc. will continue to be the franchisee and, as indicated in the attached certificate (Attachment A), will continue to be bound by the terms and conditions of the existing franchise. As you know, another group, MCV Acquiring Corp., previously sought to acquire Viacom. We sincerely appreciate your diligent efforts in handling our request to you in connection with that proposal. However, since then, Viacom's board of directors has accepted an offer from National Amusements and has terminated the prior MCV agreement which was never consummated. The National Amusements transaction has solid financial support. As documented by the attached letter from National Amusements' President Sumner M. Redstone (Attachment B), National Amusements has agreed to contribute $500 million in common equity to this transaction. In addition, $175 million will be provided by Merrill Lynch, Pierce, Fenner & Smith and $2.315 billion will be provided by a consortium of bank lenders, led by the Bank of America. National Amusements, headquartered in Dedham, Massachusetts, is engaged in the business of developing, owning and managing commercial income-producing entertainment properties, such as single and multi-screen movie theatres, drive-in movie theatres and parking facilities adjacent to movie theatres. The company is a substantial and financially solid operation with theatres in Mr. Paul Rankin March 13, 1987 Page 2 14 states and 1986 revenues in excess of $150 million. See Attachment C. Sumner M. Redstone is the President and Chairman of the Board of National Amusements and votes all of the company's voting stock. As demonstrated by the attached biographical material (Attachment D), Mr. Redstone has had a distinguished career which, in addition to his success in business, includes valued service to the nation in World War II, as well as very extensive activities on behalf of civic and charitable organizations. Further information concerning Mr. Redstone's and National Amusements' character, legal and technical qualifications is set forth in Attachment E. The purpose of this letter is to advise you of the details of the transaction and to give you an opportunity to approve the transfer of control of Viacom if you deem such approval to be necessary under the terms of the franchise. I am enclosing a draft resolution which may be of assistance to you. Because the parties anticipate completing this transaction in early spring, it would be most helpful if any required action could be taken by April 30, 1987. Your prompt attention to this matter will be greatly appreciated and will assist us in minimizing the transition period and promoting the stability and continuity of Viacom's local cable operations. The National Amusements transaction will ensure the continued strength of Viacom's financial position, will provide for stability and continuity of ownership of the company, and will guarantee Viacom's future as a major and secure force in the communications field. We are enthusiastic about Viacom's future in conjunction with National Amusements, and I look forward to working with you to complete this transaction expeditiously. Very truly yours, General Manager Attachment A CERTIFICATE This will certify that Tele-Vue Systems, Inc. will continue to be bound by all of the applicable cable franchise terms and conditions in Dublin following the transaction involving the merger of Viacom International Inc. and a wholly-owned subsidiary of National Amusements, Inc. March 13, 1987 Date: Tele-Vue Systems, Inc. President and Chairman of the Board of National Amusements, Inc. Attachment A I~~/~ CERTIFICATE This will certify that Tele-Vue Systems, Inc. will continue to be bound by all of the applicable cable franchise terms and conditions in Dublin following the transaction involving the merger of Viacom International Inc. and a wholly-owned subsidiary of National Amusements, Inc. Date: March 13, 1987 d~ Tele-Vue Systems, Inc. President and Chairman of the Board of National Amusements, Inc. Attachment B March 12, 1987 To Whom It May Concern: Please be advised that Arsenal Holdings, Inc., a wholly owned subsidiary of National Amusements, Inc., has received commitments for the financing of its acquisition of Viacom International Inc., subject to certain terms and conditions, as follows: National Amusements, Inc. will provide consisting of million in cash and 6,881,800 shares of Viacom stock· Bank of America NT&SA has agreed to act as agent for a senior secured bank credit facility in the amount of ~2.29 billion. Bank of America will provide $592 million of the amount itself and has indicated that it is "highly confident" of its ability to complete the syndicated portion of the financing. Additionally, Bank of America will provide a separate $25 million line of credit for the purpose of financing interest payments which may be made to Viacom shareholders. Merrill Lynch Capital Markets, Merrill Lynch, Pierce, Fenner & Smith Incorporated will provide $175 million through the placement or sale of subordinated debt securities. Very truly yours, Sumner 'M. Re~dst~ne President Attachment C NATIONAL AMUSEMENTS, INC. FACT SHEET ~/D 1. Description of th? Company National Amusements, Inc. is a Maryland corporation with corporate headquarters in Dedham, Massachusetts. The company's principal business is developing, owning, and managing single and multi-screen movie theatres, drive-in movies theatres and parking facilities adjacent to movie theatres. Its theatres are spread across 14 states in the east, midwest and southeast. With the exception of its stock interest in Viacom, it currently has no interest in any cable system or broadcasting system. 2. Officers and Directors 0437Z The officers and directors of National Amusements are as follows: Mr. Sumner M. Redstone President, CEO and Chairman of the Board 98 Baldnate Hill Road Newton Center, Massachusetts 02159 Mr. Ira A. Korff Vice President, Assistant to the President, Board Member 90 Beacon Street Boston, Massachusetts 02108 Mr. Jerome Magner Vice President, Treasurer and Board Member 15 North Avenue Providence, Rhode Island 02906 Mr. Louis Weiner Board Member Crown Point, Madrid Building PHJ 400 Paradise Road Swampscott, Massachusetts 01907 -1- 3. Corporate Ownership Mr. Redstone votes all of the stock of National Amusements. He owns two-thirds of the stock and votes the balance as the trustee of two irrevocable trusts for his children (the Shari Ellin Redstone Trust and theBrent Dale Redstone Trust), each of which has a beneficial interest in one-sixth of the National Amusements stock. Subsidiary Corporations - Arsenal Holdings, Inc. and Arsenal Acquiring Corp. A wholly owned suDsidiary of National Amusements, Arsenal Holdings, Inc. ("Holdings"), was incorporated in Delaware on November 10, 1986 for the purpose of acting as the holding company for Viacom. Holdings has no present operations. Its officers are Mr. Redstone, President; Mr. Korff, Vice President; Mr. Magner, Secretary/Treasurer; and Jonathan D. Tamkin, 200 Elm Street, Dedham, Massachusetts 02026, Assistant Secretary. Messrs. Redstone and Korff constitute the board of directors of Arsenal Holdings. Arsenal Acquiring Corp. ("Acquiring"), a wholly owned subsidiary of Arsenal Holdings, was incorporated in Delaware on January 20, 1987 for the purpose of acquiring Viacom. Acquiring has no present operations. Its officers and directors are identical to those of its parent, Holdings. The proposed National Amusements/Viacom transaction will be accomplished through a merger between Viacom and Acquiring. Viacom will survive the merger and become a wholly owned subsidiary of Holdings. At the close of the transaction, the present shareholders of Viacom (other than National Amusement) will hold 17.4 percent of Holdings with the balance held by National Amusements. 0437Z -2- Attachment D BIOGRAPHY OF SUMNER M. REDSTONE Sumner M. Redstone graduated first in his class from Boston Latin School. He is a graduate of Harvard University and Harvard Law School. After graduation from law school, he served as Law Secretary with the U.S. Court of Appeals and then as a Special Assistant to the U.S. Attorney General. Subsequently, he practiced law in Washington, D.C. He served with the Military Intelligence Division during the second World War where he was one of the members of the "ultra" secret group which succeeded in breaking the high-level military and diplomatic codes of Japan. Mr. Redstone was one of the few students at Harvard selected by the then Associate Professor Edwin Reischauer (later United States Ambassador to Japan) to form what became the world center of crypt-analysis. In connection with these activities, Mr. Redstone was directly commissioned by the Secretary of War and received among other honors, two commendations from the Military Intelligence Division in recognition of his service, contribution and devotion to duty. He is also the holder of the Army Commendation Award. Some thirty years ago, Mr. Redstone became heavily involved in the theatre industry, and has since played a continuing and significant role in the affairs of that industry. In addition to owning theatres, he served as President of the Theatre Owners of America, which was then the major trade association representing motion picture theatre exhibitors. He then became the first Chairman of the Board of the National Association of Theatre Owners, which is today the major trade association in the motion picture industry. A large portion of Mr. Redstone's time and energy has been, and continues to be, devoted to civic and community affairs. For several years, Mr. Redstone served as Chairman of the Jimmy Fund (Children's Cancer Research Foundation). He was a member of the Corporation of the New England Medical Center. He is a member of the Board of Overseers of the Dana-Farber Cancer Institute. He is a Vice President and on the Executive Committee of the Will Rogers Memorial Fund. Mr. Redstone has also served as State Crusade Chairman for the American Cancer Society 1984-1986. He is a former Chairman of the Metropolitan Division of the Combined Jewish Philanthropies. During President Carter's tenure, he was appointed a member of the Presidential advisory Committee on the Arts for the John F. Kennedy Center for the Performing Arts and was recently appointed a Director of the Kennedy Presidential Library Foundation. He has received various forms of community recognition for his activities. For example, he was selected as one of the then outstanding young men in New England, and recently was one of three men selected by the Boston Chamber o£ Commerce as deserving of special recognition from among those who had been previously designated as one of New England's Outstanding Young Men. In 1980, Mr. Redstone was selected as "Communicator of the Year," and in 1977 was the recipient of the William J. German Human Relations Award. He is also actively involved in the affairs of the Museum of Science of the City of Boston and the Boston Arts Festival. In 1982, Mr. Redstone joined the faculty of the Boston University Law School where he continues to lecture and teach "The Law of the Entertainment Industries." Recently, he was awarded the prestigious Silver Shingle by the Boston University Law School. -2- Attachment E QUALIFICATIONS OF SUMNER M. REDSTONE AND NATIONAL AMUSEMENTS Legal and Character Neither National Amusements nor Mr. Redstone has any ownership interests prohibited by the Cable Communications Policy Act of 1984. Furthermore, neither holds any ownership interest that would create a prohibited combination under the FCC's cross-ownership rules and policies. The good character of Mr. Redstone is reflected in the biographical material set forth in Attachment D. In addition, both Mr. Redstone and National Amusements have certified to the Federal Communications Commission that neither of them has been the subject of an adverse civil or criminal action by any court or administrative body relating to any felony or to any antitrust, unfair competition, fraud, unfair labor practices or discrimination charge. Technical and Operational Viacom will continue its commitment to the provision of quality cable television service. This commitment will be assured by adherence to the existing operational and technical standards and by reliance on the same local managers and employees.